Risk inflation

The rising compensation awards in both physical and
psychological injury cases underlines the importance of risk assessment, with
the onus on the OH department.By Janet
Gaymer

Is it better to be physically injured or to suffer a mental breakdown? There
has been an increasing public and professional debate in recent months about
the costs associated with failure to manage health-related issues. A claim for
damages for personal injury following the loss of, say, a finger may lead to an
award of £9,000 and the loss of a leg below the knee may deliver an award of
£60,000. Claims for mental injury, however, are attracting much higher awards –
often reaching six figures.

On the face of it these developments only serve to underline the importance
of the role of occupational health professionals. The Health and Safety
Executive’s most recent figures show that the cost to UK business of workplace
injuries and work-related ill-health for 1995/1996 was about £2.5bn per year
with £0.9bn for injuries and £1.6bn for illness. Non-injury accidents have been
estimated to cost between £1.4bn and £4.5bn per year.

A research programme commissioned by the British Occupational Health
Research Foundation found a clear shift from safety- to health-related issues
in the workplace. The top issue was musculoskeletal problems closely followed
by work-related stress. According to the Institute of Personnel and Development
6 million working days are lost each year through stress, and it puts the
annual cost of stress-related illness at between £5 and £12bn. This translates,
according to the Confederation of British Industry, into a cost of £10bn in UK
business days lost.

Workplace stress

So what trends can be defined in the case law relating to these issues? In
relation to claims for stress in the workplace awards appear to be increasing.
The trend was started with the settlement of the case of John Walker in 1996
for the sum of £175,000. Subsequently Janet Ballantyne was awarded £66,000,
Beverley Lancaster received £67,000 in July 1999 and Roderick McCleod accepted
a settlement of £200,000 following a bullying allegation. Finally, Randy Ingram
received £203,000 from Worcester County Council after being shot at and
assaulted in his job as warden of a travellers’ site.

Disability claims

Turning to claims under the Disability Discrimination Act, which are
increasingly linked with claims of stress, the awards may not be as high. For
example, in an unreported case at the Liverpool Employment Tribunal concerning
multiple sclerosis only £2,000 was awarded for injury to feelings (Samuels v
Weslyan Assurance Society) and £4,250 was awarded in another unreported case of
epilepsy in Hull, again for injury to feelings (Holmes v Whittingham). It is
worth remembering that exemplary damages are not recoverable in discrimination
cases as they are the creature of statute, damages being compensatory and not
punitive.

Health and safety

In relation to health and safety issues, there are signs that current
legislation is being used creatively in order to increase financial recovery.
The Trade Union Reform & Employment Rights Act 1993 introduced rights not
to be subjected to a detriment or unfair dismissal on health and safety grounds.

These rights are contained in Section 44 and Section 100 of the Employment
Rights Act 1996. The latter section provides that where an employer dismisses
an employee for a prohibited health and safety reason the dismissal is
automatically unfair. The reasonableness of the employer’s action in dismissing
is not a matter which is taken into consideration. It applies to all employees
regardless of length of service or age. The limit for the compensatory award in
claims of unfair dismissal was lifted to £50,000 with effect from 25 October
1999.

Discrimination

Recently the Employment Appeal Tribunal considered two cases raising
specific aspects of the statutory rights. In Harvest Press v McCaffrey, the
Employment Appeal Tribunal upheld the decision of a tribunal that an employee
who was dismissed after walking out of work because of a colleague’s
threatening and abusive behaviour was protected by the section and was
automatically unfairly dismissed.

A decision of the Court of Appeal last year may also have far reaching
consequences in relation to claims for discrimination. In Sheriff v Klyne Tugs
the Court of Appeal concluded that an employment tribunal has jurisdiction to
award compensation by way of damages for personal injury including both
physical and psychiatric injury caused by the statutory tort of unlawful
discrimination. A claimant is therefore entitled to be compensated for the loss
and damage sustained as the result of the statutory tort.

These developments serve to underline the importance of employers conducting
thorough investigations into any allegations of health and safety infringement
and to ensure appropriate action is taken.

Where risk assessments identify hazards which need the expertise of
occupational health professionals, this may not be expensive, but an award by a
court or tribunal may be very costly.

Janet Gaymer is employment law partner at international law firm Simmons
& Simmons

Case Roundup

Harvest Press v McCaffrey EAT (1999) IRLR 778 An employee was dismissed after walking out of work because of the
threatening and abusive behaviour of a colleague.

The case found this may be an automatic unfair dismissal if the reason for
the dismissal is that "in circumstances of danger which the employee
reasonably believes to be serious and imminent" and which he could not
reasonably have been expected to avert, he left his place of work. In this
context the word "danger" covers any danger no matter how it arose.

Sheriff v Klyne Tugs (Lowestoft) CA (1999) IRLR 481If an employee claims racial harassment, abuse, intimidation and bullying
so that he suffers a nervous breakdown and becomes unfit for work, they may
claim in the employment tribunal damages for personal injury including both
physical and psychiatric injury.

Where this type of claim is made, the complainant may be well advised to
obtain a medical report for the purposes of the employment tribunal
proceedings.

Teasdale v John Walker T/a Blaydon Packaging (12.4.99 Case No.
2505103/98)A breach of the duty to take reasonable care of an employee’s health and
safety involving the replacement of worn out ropes for securing lorry loads is
a fundamental breach of contract entitling the employee to resign and claim
constructive dismissal.

Where the reason for this type of dismissal falls within Section 100 of the
Employment Rights Act 1996 the dismissal is automatically unfair.